Rensselaer County, Hudson River-Black River Regulating District negotiating settlement for 2010 bill

By Ian Benjamin

Friday, January 11, 2013

Rensselaer County is in negotiations with the Hudson River-Black River Regulating District to settle litigation regarding what portion of the district's annual operating costs both New York state and the county should be held liable for, according to Rensselaer County Attorney Stephen Pechenik.

"We're involved in settlement negotiations and at the same time are pushing forward with the administrative disputes," he explained. Negotiations are expected to come to a head during a Jan. 30 hearing in Johnstown.

The dispute arose in 2010 when the district billed five upstate counties for the cost of providing flood services. Out of a total of $4.45 million, Rensselaer County was billed for $961,675, but neither Rensselaer nor any of the other counties have yet paid the amount for which they were initially assessed.

Since the 1920s, the Hudson River-Black River Regulating District has been responsible for water level control in the Upper Hudson River and Black River watersheds, and works to mitigate damage during flooding and augment river flow when water levels are low.

Historically, 80 percent of the district's operating costs were billed to the companies that owned the hydroelectric plants which benefited from the district's operations. Such was the case until 2008, when a federal court ruled the district was improperly billing the companies, a decision that left a $4.45 million deficit in its operating budget.

To fill the fiscal void, the district began billing the five counties within the 100-year floodplain where it operates in 2010 for the difference. The amount was divided up amongst the counties based on river frontage and property values, leaving Albany County with the largest bill at $1.75 million, followed by Saratoga at $1.3 million, Rensselaer, Warren County at $297,216 and Washington with a bill for $175,249. In preparation for the possibility of having to shoulder their portion, Rensselaer County allotted $1.2 million towards the cost in 2011.

Unwilling to pay for what they believed to be an illegal bill and unable to withstand the additional burden without passing the cost along to the taxpayers, the counties challenged the district's bill in court. That initial case was dismissed in April 2011.

The counties then appealed the decision, but in an unprecedented move, and much to the counties' dismay, the Third Department Appellate Division decided largely in the district's favor - ruling that charging the counties for flood protection was legal. However, the ruling did uphold some of the counties' arguments, namely that the state should be liable for some of the cost because part of the bill being assessed to the counties was for state-owned land.

The counties' have maintained that the Appellate court ruled in error, and attempted to appeal the case again in what was, ultimately, a futile effort, as that court would not even hear the case.

Rensselaer County is now disputing the amount for which the state should be held liable. Officials from the district originally claimed the state should fund 11.9 percent of the annual assessment with the counties footing the rest, but negotiations are now ranging between a 19 percent figure proposed by the district and a 40 percent figure backed by the counties, Pechenik said.

The negotiations will effect exactly which county will have to foot the highest bill. As they currently stand, Albany County would be held liable for the highest amount with either Rensselaer or Saratoga county footing the next highest bill.

"Depending upon what the state is credited for will have a great effect on Saratoga's amount," Pechenik said. "It's all changing."

So far, the litigation surrounding the case has cost Rensselaer County between $20,000 and $25,000 in legal fees, an amount that could be indirectly recouped if the counties are able to achieve a state increase of even 25 percent. If such were to be the case, the funds to cover the fees "would have been well spent," Pechenik said.